Unfinished
buildings,
abandoned
part
way
through
construction,
in
Wuxi,
China,
on
Tuesday,
May
16,
2023.
China’s
economic
recovery
is
losing
momentum
after
an
initial
burst
in
consumer
and
business
activity
early
in
the
year,
prompting
calls
for
more
policy
stimulus
to
bolster
growth.
Photographer:
Qilai
Shen/Bloomberg
via
Getty
Images
Bloomberg
|
Bloomberg
|
Getty
Images
Weak
economic
data
out
of
China
despite
an
expected
rebound
has
prompted
talk
that
Beijing
will
have
to
boost
fiscal
stimulus
—
and
some
economists
say
the
property
sector
could
be
in
focus.
Prices
in
China’s
housing
market
has
been
on
the
rise,
but
sales
have
slowed,
research
firm
China
Beige
Book
said
in
a
May
report.
Citi
economists
said
a
property-focused
stimulus
package
may
be
imminent,
and
pointed
to
a
local
media
report
that
showed
deteriorating
sentiment
in
resale
home
listings
and
a
decline
in
transaction
volumes.
//
“The
stimulus
package
could
be
centered
on
the
property
sector,
with
expansionary
monetary
and
fiscal
policies
to
keep
up
growth
momentum,”
Citi
economists
led
by
Xiangrong
Yu
wrote
in
a
Tuesday
note.
“We
think
the
overall
policy
tone
for
this
sector
could
transfer
from
stabilizing
to
cautious
stimulating.
More
efforts
would
be
needed
to
stop
a
downward
spiral,”
they
wrote.
Critical
two
months
ahead
Citi
economists
say
the
stimulus
could
come
as
soon
as
June
and
more
significant
measures
may
be
introduced
in
China’s
Politburo
meeting
in
July.
“The
coming
two
months
will
be
a
critical
window
to
act,”
they
said.
The
economists
laid
out
some
options
for
a
property-focused
stimulus
package
from
China:
more
mortgage
rate
cuts;
funding
support
for
property
developers;
and
lowering
down
payment
ratios
for
second-home
purchases.
watch
now
These
steps
would
follow
a
potential
cut
in
medium-term
lending
facility
rates
or
reserve
requirement
ratio,
the
report
said.
The
measures
would
boost
housing
demand
in
families,
especially
those
with
two
or
more
children
outside
of
core
regions
of
China.
“The
policymakers
will
probably
have
to
reconcile
any
new
stimulative
measure
with
the
overreaching
guideline
that
‘housing
is
for
living,
not
for
speculation,’
even
though
the
mantra
could
be
omitted
in
upcoming
policy
meetings,”
Citi
economists
wrote.
Don’t
expect
a
‘bazooka’
Nomura’s
Chief
China
economist
Ting
Lu
said
“the
situation
of
China’s
property
sector
appears
dire.”
The
Japanese
investment
bank
doesn’t
expect
a
“bazooka”
stimulus
package
but
predicts
it
will
be
introduced
in
a
cautious
manner.
“We
believe
measures
will
be
introduced
in
a
piecemeal
step-by-step
manner,
and
be
implemented
mainly
in
tier-2
cities,”
Nomura
economists
wrote.
They
pointed
to
the
latest
wording
from
top
policymakers
and
their
emphasis
on
“security”
–
how
this
is
an
indicator
for
the
scale
of
a
stimulus
package
to
come.
watch
now
“With
decision
making
now
highly
centralized,
and
with
an
emphasis
on
‘security,’
efforts
to
pass
a
support
package
for
the
property
sector
may
progress
only
gradually
and
could
even
be
easily
blocked
for
various
non-economic
reasons,”
they
wrote.
Nomura
expects
the
so-called
“rescue
package”
to
be
rolled
out
slowly.
“Amid
worsening
growth
prospects,
we
expect
Beijing
to
eventually
announce
a
rescue
package,
although
most
likely
these
supportive
measures
will
be
gradual,”
they
wrote.
“The
best
we
can
expect
are
policies
that
finally
stem
the
downward
spiral
and
stabilize
new
home
sales
at
slightly
above
current
levels.”
